Global contracting giant Acciona has pledged to be carbon neutral by the end of 2016. It’s a leading stance. How is it going to achieve it?
For a contractor the size of Acciona to announce its intention to become a carbon neutral company in 2016 is a bold call.
The Spain-based giant turned over €6.5bn (£5bn) in 2014 and builds infrastructure projects across Europe and the world – and indeed is bidding to build High Speed 2 in the UK.
But it has clear ambitions to be not just a sustainable company, but the most sustainable company in the world.
Acciona A30 Puente Beauharnois
That is what chairman and chief executive José Manuel Entrecanales told the COP21 UN Climate Summit in Paris at the end of last year.
“Our ambition is to be the most sustainable company in the world – in our choice of investments, in the services we deliver, and in the day to day of our business operations,” he said.
“Henceforth, the mitigation of climate change will become Acciona’s top strategic objective, and we will achieve this by investing in new renewable energy capacity and by building resilient infrastructure for 21st century societies,” he added.
Carbon neutrality, or having a net zero carbon footprint, occurs when a business is able to balance the CO2 emissions associated with its activities with an equivalent amount sequestered or offset, or by buying enough carbon credits to make up the difference.
Acciona is already one of the largest electricity producers exclusively dedicated to renewable energy, with 8,614MW of installed capacity in 15 countries.
Entrecanales said that the company plans to invest a further $2.5bn in new renewable energy installations over the next five years, mostly in developing countries, to increase installed capacity to 10,500MW. On current trends, this will allow Acciona to avoid the emission of more than 20M.t CO2 equivalent per year – the equivalent of the annual output of more than 4M vehicles.
On top of that, through Acciona’s Microenergy Foundation the company will continue to compensate for emissions it cannot eliminate or offset through contributions to the United Nations’ Sustainable Energy for All initiative.
The new pledge to achieve carbon neutrality by 2016 follows the successful conclusion of Acciona’s first five-year sustainability masterplan, which reduced group CO2 emissions by 46% in five years.
We are setting emissions reduction targets from now until 2020 for every business unit, and each year the target is more severe than the previous year
Juan Ramon Silva Ferrada, Acciona
“Carbon neutrality attracts media attention but it is just one of the targets we have around sustainability,” explains Acciona sustainability senior executive Juan Ramon Silva Ferrada. “We are setting emissions reduction targets from now until 2020 for every business unit, and each year the target is more severe than the previous year,” he says.
To show how seriously these targets are taken, Ferrada explains that they are linked to the salaries of the management teams.
And this commitment is also applied to the supply chain.
CO2 and water use targeted
The company has become one of the first in the world to measure the CO2 emissions and water consumption of its global supply chain, totalling 28,000 suppliers in 75 countries. Water use and CO2 emission analyses were audited by PWC, based on official “input-output” models from 130 countries included in the World Business Council for Sustainable Development ‘s Corporate Value Chain (Scope 3) Accounting and Reporting Standard.
It is demanding and Acciona now carries out around 1,000 random audits of its suppliers’ reporting of emissions and water consumption.
“It is a matter of being stronger with our suppliers,” says Ferrada. “But on the other hand we make free training courses available to them to help them improve.
The process has also enabled Acciona to identify the 500 suppliers with the most intensive use of water and those responsible for 70% of the supply chain’s CO2 emissions - and it is now putting a programme in place to work with these firms specifically to promote the reduction of CO2 emissions.
In the infrastructure sector these firms are typically suppliers of heavy materials such as concrete and steel. “In infrastructure we buy a lot of concrete and a lot of steel and so it is not an easy job to reduce emissions,” says Ferrada. “We know it is not easy; we are working in sectors where we know there are going to be losers; but we will work with them to make the transition.”
Seven years ago it would have been unthinkable that you would go and present to investors and financial analysts on sustainability. Now it is common
Juan Ramon Silva Ferrada, Acciona
The passion for sustainability may well come from the desire to do good by the planet, but there is also a strong business incentive. Acciona is quoted on the Ibex 35 stock market and Ferrada explains that investors are very interested in the firm’s sustainability performance.
“What we are communicating to our investors here is critical. The interest in sustainability has changed radically in the last seven years. Seven years ago it would have been unthinkable that you would go and present to investors and financial analysts on sustainability. Now it is common,” he says.
“Climate change is now the big risk. On most of our contracts we have 25 to 30 years of responsibility for the infrastructure we create, so how will climate change affect that? It is why we are committed to combatting it. It is also why we have a strong political activity and why we are pressing for stronger regulations and more ambitious measures to stop climate change – because its our business to understand and minimise the risks.”
Willmott Dixon already there
Building contractor Willmott Dixon has been carbon neutral since 2012.
Like Acciona, Willmott Dixon has aspirations to reduce the energy use and carbon emissions of its operations, it realises it is not possible to eliminate all of these emissions in the foreseeable future.
So it invests in projects overseas which will save carbon emissions equivalent to those it emits. The projects it chooses to invest in reflect its values and what it does as a business, and aligns with the aims of the Willmott Dixon Foundation.
In 2014 it worked with The Carbon Neutral Company to offset its 2013 carbon emissions. The projects it invested in are providing significant community and environmental benefits, as well as reducing the emission of harmful greenhouse gases from the atmosphere.
Typical projects included the Bandeira e Capelli project that has replaced unsustainably sourced wood with biomass waste for fuel at two small brick and roof-tile factories in north-east Brazil. The switch is helping preserve vitally important Amazonian and Caatinga eco-systems. The project provides technical, safety and literacy training, as well as supporting a number of philanthropic causes.
Willmott Dixon self-certifies carbon neutrality in accordance with PAS 2060, a specification standard detailing how to demonstrate carbon neutrality, produced and published by the British Standards body BSI.